Gradualism in Bargaining and Contribution Games

S-Tier
Journal: Review of Economic Studies
Year: 2004
Volume: 71
Issue: 4
Pages: 975-1000

Authors (2)

Olivier Compte (not in RePEc) Philippe Jehiel (Paris School of Economics)

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper identifies a source of gradualism in bargaining and contribution games. In the bargaining games we examine, each party can opt out at any time, and the outside option outcome is assumed to depend on the offers made in the negotiation phase. Specifically, we assume that (1) making a concession in the negotiation phase increases the other party's outside option pay-off and (2) the outside option outcome induces an efficiency loss as compared with a negotiated agreement. The main finding is that the mere presence of such history-dependent outside options forces equilibrium concessions in the negotiation phase to be gradual, and the degree of gradualism is characterized. The model also applies to contribution games in which the outside option may be interpreted as the option to implement a partial project using the total contributions made so far. Copyright 2004, Wiley-Blackwell.

Technical Details

RePEc Handle
repec:oup:restud:v:71:y:2004:i:4:p:975-1000
Journal Field
General
Author Count
2
Added to Database
2026-01-25